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Orientation
Plymouth and South Shore Association
of REALTORS®
2013
Welcome New Members!
• The goals of this Orientation session include:
– To explain what it means to be a REALTOR®
– To introduce you to the three levels of membership, National, State and
Local
– To review the REALTOR® Code of Ethics
– To highlight important aspects of Agency
– To create awareness of Government Affairs and the REALTOR® Political
Action Campaign (RPAC)
– To familiarize you with the key aspects of Anti-Trust and Fair Housing
2
Agenda
• 8:30–8:45am
Welcome & Introductions
• 8:45–9:15am
What is a REALTOR®?
• 9:15–11:45am
Code of Ethics
• 11:45–12:30pm Networking Lunch
• 12:30-1:45pm
Agency
• 1:45-2:30pm
Government Affairs & RPAC
• 2:30-2:45pm
Break
• 2:45-3:45pm
Anti-Trust & Fair Housing
• 3:45-4:30pm
Wrap up & Quiz
3
Over 1 million strong!
• National Association of REALTORS® (NAR) www.realtor.org
– Code of Ethics
– REALTOR® Magazine http://realtormag.realtor.org/
– REALTOR® Designations and Certifications http://tinyurl.com/bmomgxe
– REALTOR® Federal Credit Union https://www.realtorsfcu.org/
• Massachusetts Association of REALTORS® (MAR) www.marealtor.com
– Bay State REALTOR® publication http://tinyurl.com/acdojtx
– Legal Hotline 800-370-5342
– Technology Hotline 866-232-1837
– On-line Continuing Education
4
YOUR Local Association
• Plymouth and South Shore Association of REALTORS® (PASS)
www.passrealtors.com
• Leadership http://tinyurl.com/bhujesk
• PASS Real Estate School #1131 offers local live classes and
access to MAR’s on-line education http://tinyurl.com/agtprxx
• Monthly newsletter – “PASSWord”
http://tinyurl.com/bfkhh5m
• Networking events, Membership meetings and more!
http://tinyurl.com/b9zk7y9
• “Like” PASS on Facebook!
5
Code of Ethics
• National Association of REALTORS® Code of Ethics
http://tinyurl.com/b6yfk9d
• Required of all REALTORS® in each 4 year “Quadrennial” to
maintain Active REALTOR® status.
• The current Quadrennial is 2012-2015 and this course fulfills your
requirement.
6
Code of Ethics
History
• National Association of Real Estate Exchanges
• Formed on May 12, 1908
• Code of Ethics was created in 1913
• MAR was formed in 1927 and adopted the code at that time
7
Why do we have a Code of Ethics?
• The “Wild West”
• Caveat emptor: “Buyer beware”
• To establish professional standards
• Binding on all Realtors®
• It was good for business
• The Code became the basis for state licensing laws
• MA started licensing in 1957
8
9
The Golden Rule
Ethics defined:
• ethics (ĕthîks) The rules or standards governing the conduct of
the members of a profession.
– The American Heritage Dictionary
10
Code of Ethics
Structure
• The Three Major Sections
1.Duties to Customers and Clients
2. Duties to the Public
3. Duties to Realtors®
11
Act in the
Best Interests
of the Client,
Honesty
12
Avoid Misrepresentation
13
Cooperation – not Compensation
14
Disclose
Interest in
Property – “I’m a Realtor”
15
Disclose contemplated
Interest in Property
16
Disclose Profit from Other Services
17
Consent for Fees
from more than
One Party
18
Escrow Funds
Separate – No
Comingling
19
Get Agreements in Writing –
Whenever possible
20
Shall not
Discriminate
Protected
Classes
Fair Housing
21
Must be Competent
to Perform Services
22
Truth in
Advertising
23
Shall not Practice Law
24
Cooperate with Professional
Standards Process
25
Don’t speak poorly of
Competition
26
Don’t interfere
with another
Realtors Agency
Relationship
27
Obligation to Participate
in Arbitration
28
Code of Ethics
Case Studies
29
Enforcement
• Ethics
Deals with alleged violations of the Code
• Arbitration
Deals with business disputes
The same basic process is used for both types of enforcement.
30
Enforcement
• Ethics
A. Filing a complaint
B. Grievance Committee
C. Professional Standards Hearing Panel
D. Discipline
• Discipline
A. A fine up to $15,000
B. Suspension or Termination of membership
C. Require additional education course(s)
31
Enforcement (cont.)
• Arbitration
A. Filing a complaint
B. Grievance Committee
C. Mediation (allows for compromise)
D. Professional Standards Hearing Panel
E. Payment of award (all or nothing)
• Appeal
A. To the Board of Directors
B. Due process
C. Decision is final
32
Networking Lunch
Please enjoy lunch with our
featured 2013 PASS Sponsors!
33
Agency Relationships
Types of Agency Representation
– Sub Agency
– Buyer Agency
– Facilitation (Non-Agency)
– Designated Agency
– Dual Agency
– For Definitions and Resources visit:
– http://tinyurl.com/af7llv2 (Buyer and Seller
Handouts are included on this site.)
34
The Definitions
• Agency: The relationship resulting from mutual consent between
the principal and his or her agent that the agent will act on the
principal’s behalf and be subject to his or her control.
• Agency Relationship: Under the common law, this relationship is
defined as follows.
1. Agency is the fiduciary relationship which results from the
manifestation of consent by one person to another that the other shall act on his behalf and
be subject to his control, and consent by the other so to act.
2. The one for whom action is taken is the principal.
3. The one who is to act is the agent.
• Agent: A licensee who has agreed to act on behalf of his or her
principal and to be subject to that principal’s control. The agent in a
common law state is the brokerage represented by the principal or
designated broker, also called broker in charge.
35
Asking the Questions
• What is the Foundation of an Agency Relationship?
Are you a “Client”
or are you a
“Customer”?
36
What is a Client?
• A client is someone who engages the services of and is represented by an
agent in a transaction. The agent for the client will negotiate the best price
and terms for that client.
• A SELLER becomes a client by signing a Listing/Marketing Agreement with a
real estate company that clearly establishes the obligations of both parties.
• As SELLER CLIENT, your interests are protected by the agent’s duties to you
including obedience, loyalty, disclosure, confidentiality, accountability and
reasonable care.
37
What is a Subagent?
• A subagent is an agent of another agent. Both agents represent
the CLIENT – who could be either a BUYER or SELLER. The
subagent works with a CUSTOMER but for the CLIENT.
What is a Customer? What is a Buyer Customer?
38
What is a Buyer Client?
• A BUYER can become a client by requesting that the broker be a BUYER’s
agent. The agent for the BUYER CLIENT will negotiate the best price and terms
for that client. A BUYER becomes a client by signing a Buyer.
• A BUYER becomes a client by signing a Buyer Representation Agreement with
a real estate company that clearly establishes the obligations of both parties.
As a BUYER CLIENT, your interests are protected by the agent’s duties to you
including obedience, loyalty, disclosure, confidentiality, accountability and
reasonable care.
39
What is a Dual Agent?
• A dual agent is a real estate broker who represents both the
BUYER and the SELLER in the same transaction.
• Dual agents must have the informed consent of both the BUYER
CLIENT and the SELLER CLIENT in order to act as a dual agent.
40
What is Designated Agency?
• A Designated Agent is when one Salesperson|Broker in a brokerage is
appointed to represent the Seller, and another Salesperson|Broker
within the same brokerage is appointed to represent the Buyer without
either salesperson being considered a dual-agent.
Brokerages practicing designated agency must:
Disclose at the commencement of the relationship the limited relationship with the buyer or seller.
Serve as agent only to the party the licensee agreed to represent.
Fulfill the duties owed to the respective client, as spelled out in the license law and in the agency agreement. When & if another
agent is designated to appoint a client on the other side of the same in-house transaction, the appointing broker becomes a
dual agent.
41
What is a (non-agent) Facilitator?
• A Facilitator is when a licensee who works as a facilitator assists
the Buyer and Seller to find one another and reach an
agreement.
42
Subagency in MA (as of 2005)
• Subagency occurs when one real estate agent (brokerage)
“hires” another real estate agent, in a separate firm to help
perform his or her duties. Brokers and Salespersons working as
subagents treat consumers as customers.
• Subagency occurs most commonly when listing agents offer
compensation to subagents to assist in finding a buyer for their
listing. Buyer agents, however, also use subagents to assist them
in finding property for their buyer clients.
•
*Effective July 1, 2005, in order to practice subagency in Massachusetts the brokerage firm must obtain written
permission from the client before offering compensation to subagents. This written permission must include a disclosure
of the risks of vicarious liability. The law in Massachusetts applies equally to both kinds of subagency. Each real estate
company must decide individually whether or not to offer compensation to subagents.
43
The Seller Agent
• Liability and Responsibility
– Represent the seller on a client basis and treat the buyer as a customer
– Agent must carry out all lawful instructions of the seller
– Reasonable care – due diligence – agent must act competently, capable
of performing duties within scope of license
• Vicarious Liability
– When one person is liable for the negligent actions of another person,
even though the first person was not directly responsible for the action.
For instance, a selling broker is liable for a subagent’s words and/or
actions, even if they contain misinformation
44
The Seller Agent (cont.)
• Confidentiality
• Duty to keep clients requirements, information or discussion confidential, duty
survives termination of agency relationship
• Seller Agent’s Disclosure to Prospective Buyers
– “Seller Disclosure Form” – seller’s consent to disclose information pertaining
to the sale of their home
45
Overview: Duties of a Seller’s Agent
In addition to their general fiduciary responsibilities, licensees acting as seller’s agents, including
listing agents and subagents, owe the following specific duties to their clients:
• To obtain written consent from the seller prior to offering
Subagency. Seller consent must include a disclosure that the
seller has been advised of the risk of vicarious liability.
• To seek an offer to purchase at a price and with terms
acceptable to the seller. Unless the seller directs otherwise, the
listing agent is not usually obligated to seek additional offers
once the property is subject to a contract of sale.
• To present all offers forthwith (i.e. in a timely manner).
• To obtain written consent before acting as dual agent.
46
The Buyer Agent
• Liability and Responsibility
–
–
–
–
Represent the buyer on a client basis
Agent must carry out all lawful instructions from the buyer
Disclose all information relevant to the client
Confidentiality of client information or discussion
• Compensation
–
–
–
–
Client pays fee
Offer compensation by listing broker through MLS
Compensation directly from transaction proceedings
Hourly – flat fee - % fee of purchase price
47
The Buyer Agent (cont.)
• Establishment of Agency
–Express written or oral contract where agent
and client agree to terms
–Implied agency by actions or words
• Obligation
– To work in the best interest of that buyer
obtaining them the best terms, conditions
and price
48
Overview: Duties of Buyer’s Agent
In addition to their general fiduciary responsibilities, licensees acting as buyer’s agents owe the following specific duties to their clients:
• To use reasonable efforts to locate a property at a price and on terms
acceptable to the buyer. Unless the buyer directs otherwise, the
buyer’s agent is not obligated to continue to show properties to the
buyer once the buyer is a party to a contract to purchase.
•
A licensee does not breach any duty or obligation to the buyer by showing
the same property to other buyers, or by acting as an agent or subagent for
other buyers. However, it is recommended that this be stated in a buyer
agency agreement.
• To present each offer or counteroffer to purchase to the listing agent in
a timely manner, even if the property is subject to a contract of sale.
• To obtain consent before acting as a dual agent.
49
Termination of an Agency
Relationship
•
Expiration of agreement
•
Mutual agreement to terminate
•
Completion of performance
•
Death or insanity
•
Impossibility of performance
•
Incapacity (i.e. mentally incapable) bankruptcy
50
Q&A
1.
You’re doing an open house and you represent to a
perspective Buyer your relationship with the Seller that of
a Seller’s agent, the Buyer requests representation and
your office practices “designated agency.” What’s your
response to the Buyers’ request?
2.
You have completed an evaluation on a home and
realize the next day that you lost the listing to your
competition. During the evaluation, the seller revealed
personal information to you. You realize a buyer client
you’re working with would express interest in the home
knowing what you know about the seller. Can you still
represent the buyer in this transaction?
51
Q&A
3. Your office practices dual agency, what are your
responsibilities to both the Buyer and the Seller?
4. You’re the listing agent of a home and the Seller asks
“What’s the vicarious liability they have with a Buyer’s
agent?” What’s your response?
52
Q&A
5. You represent a Buyer who is interested in seeing a
home. Another Buyer whom I represent also wants to
see the same home. Is it a violation of my agency
duties to show it to both of them?
6. Can words and actions on the part of the agent result
in an implied agency relationship?
53
Resources
• For Definitions and Resources visit:
• http://tinyurl.com/af7llv2
• Buyer and Seller Handouts are included on this site.
• www.MARealtor.com
• http://www.realestatewiki.com/
54
Government Affairs & RPAC
• If Real Estate is your profession, then
politics is your business!
55
Restrictions to Private Property Rights
• Zoning
• Regulatory Agencies
• Taxes
• Condemnation / Eminent Domain
56
National Association of Realtors® at
work for Real Estate
• Mortgage Interest Deduction
• National Flood Insurance Program
• Fannie Mae Short Sale Commissions
57
The Massachusetts Association of
Realtors® at work for Real Estate
• Sales Tax on Services
• Town of Shirley Sign Fee Proposal
• Vacation Home Rental Tax
58
Current statewide issues affecting
Real Estate
• H-123 Real Estate Licensing
– Continuing Education to 20 hours bi-annually
• H-3723; S-2076 Second Hand Metal Dealer Registry
– Require scrap dealers to keep a log of information from all transactions ( ie,
purchasing metal from walk-in customers
– Forward the information on the item and the seller to the Criminal History
Systems Board within 48 hours
– Retain all metal items received for 10 days
59
Current issues continued
• S1698 Energy Audits - Requires all home owners to furnish
prospective buyers with a completed energy evaluation
–
Massachusetts has the nation’s third oldest housing stock;
–
MassSave already provides homeowners advice and resources to make their homes more
energy efficient upon request.
–
MAR is opposed to any mandate that would label or “score’ homes in terms of energy
efficiency
–
MAR is opposed to any governmental agency or contractor taking thermal images of
people’s homes without the prior consent or permission of the homeowner
• Transfer Taxes
– On-going year after year
60
What can I do?
• Register to vote!
61
What can I do?
Join the Realtor® Political
Action Committee (RPAC)
62
What can you do?
• Realtor® Day on Beacon Hill
June 5, 2013
• NAR Mid-Year Legislative Meetings
May 13-18, 2013
• PASS Legislative Social (Sept)
63
Government Affairs & RPAC
• REALTOR® Call for Action Centers
• National level http://www.naractioncenter.com/
• State level http://tinyurl.com/amsaqkn
• 2012 NAR Public Policy Accomplishments http://tinyurl.com/am935wq
• Donate to REALTOR® Political Action Committee (RPAC) today!
http://tinyurl.com/aych8ed
64
Anti-Trust
• Anti-Trust Laws promote competition in the
marketplace
• Anti-Trust Pocket Guide from NAR
http://tinyurl.com/aze8uut
65
Fair Housing
• Fair Housing Laws prevent discrimination of protected classes
• Fair Housing Handbook from NAR http://tinyurl.com/agjtka3
• Fair Housing HUD Poster
http://tinyurl.com/6lvdqr6
• Fair Housing Poster (MA Law) http://www.mass.gov/mcad/fairhouse.pdf
• April Fair Housing Annual Member Meeting (April 10, 2013)
66
Orientation Quiz
67
REALTOR® Pledge
I pledge myself:
• To strive to be honorable and to abide by the Golden Rule
• To strive to serve well my community, and through it, my country
• To abide by the REALTOR® Code of Ethics and to strive to confirm my
conduct to its inspirational ideals
• To act honestly in all real estate dealings
• To protect the individual right of real estate ownership and to widen
the opportunity to enjoy it
• To seek better to represent my clients by building my knowledge and
competence.
68
Congratulations!
69
PASS 2013 Premium and Platinum
Sponsors
70